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tv   [untitled]    February 15, 2014 9:30am-10:01am PST

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[applause] >> congratulations. >> thank you. >> madam clerk can you call the next item. >> item four is a hearing hearing regarding the municipal transportation agency contracting process for the new flyer hybrid buses to obtain additional information regarding the contributing process and the construction of the fleet. >> okay. supervisor camp os is joining us for this item. >> thank you madam chair and great to be back at government audit and oversight committee -- >> excuse me. can everyone clear the room quietly and have the conversations outside. thank you. >> thank you madam chair and i want to wish everyone in advance a happy valentine's day tomorrow so this is an item that i requested a hearing because i really believe it's important for us without pointing fingers to really understand the process by which contracts are entered
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into by various agencies. my own experience is that you can tell a lot how an agency is managed and the operations of that agency how they do contracts, and and we all know the board of supervisors has been working with the municipal transportation agency to shape its five year plan to replace vehicles in its aging fleet and we are grateful that there is a move to replace many of these vehicles. we want our system and our buses to be as reliable as they can be, and the reason that i called for this hearing is because as was reported by the sf weekly i do think there are questions that should be answered with respect to the process that was followed for the purchase of the vehicles at issue, 50 vehicles for
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$38 million. and specifically and i know that we have a presentation here from the mta and i want to thank mr. hailey and his staff for answering all. questions we had and the information they provided. i think it's an opportunity for us to really have as much transparency how the contract here happened, how is it that we got to the point of having vehicles delivered to the mta before the contract was actually approve d by the board of supervisors, and for reading that article and some of the information that has been put out there you know it does seem that there's an argument to be made that this contract happened on a handshake and i don't know that's necessarily how you want to see contracts being done, not only by the mta but by any government agency, and what i am especially concerned about is
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that at some point in the process of reviewing these vehicles there was an internal review that was being done by the mta to decide what was a better investment with respect to the engines at issue, whether or not bae engine or allison engine was a better choice or better purchase for the muni riders that ultimately have to use these vehicles, and in this case the purchase at issue was made at least it seems without a completion of the internal review of whether or not one particular vehicle was actually better than another. i am not questioning the decisions that were made but i would simply like to get more information because from my perspective before you make an investment of $38 million and there is an
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internal review focusing on this type of engine is better i would like to -- i suspect that you would to see that internal review completed before you go ahead and make a purchase. i am also concerned with recent report that was also made by the sf weekly that one of the buses that was purchased, coach number 8711 which was one of 50 flier hybrid buss in this $38 million deal took a very long time to get to san francisco. it arrived on january 17 after a 1900-mile journey from minnesota and this was a journey that began on december 18 and as a
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taxpayer, as a rider of muni, i do have a concern if one of the buses that we just purchased takes a month to get to san francisco, and from what i understand at least 10%, and maybe that's a number incorrect and will be corrected today by muni. at least 10% of the $700,000 hybrid buses failed in route to san francisco, and so i think that we have a responsibility to make sure that when we make this kind of investment that the vehicles we're purchasing for the use of our riders are as reliable as possible. i am also concerned that as reported in this article and maybe it's incorrect, that the information that you would want a vendor to provide to muni specifically information about the mechanical history of the
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bus a question -- doesn't seem like that has been provided so without prejudging this issue one way or the other i want to make sure that we have transparency and at the end of the day if one of my constituents ask if we made a good investment? was the investment done in a responsible way that follow best practices that we in fact have done that and to the extent that the agency can show that i will be very happy, but to the extent that's not the case i think it's important for the public to know that, so with that unless there's any comments from my colleagues i will ask if i may madam chair the mta, mr. hailey. i think they have a presentation . >> thank you supervisor. thank
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you. i would piggyback my thanks for the opportunity to be here and one of the things that will say and i appreciate the fact that you have recognized for the last three or four years when anybody asks us what are the things we're going to do to fix muni service one of the things we say is essential and a building block to do that is fix the fleet, and it is been a tremendous help and a partnership between the board and the sf mta. you have been consistent and strong in your support for not only using prop k money for component overhauls for also new purchases which we appreciate. i will also say part of what we have done is we're in the process of building and improving the reliability of the fleet at the same time we're meeting and leading even the
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nation -- excuse me, from an environmental standpoint with clean air because we remain -- as i will point out more specifically in a minute. we are able to improve our reliability by meeting the aggressive environmental goals we set for ourselves, so with that i have put some information together to try to respond to the concerns that have been raised and i think we're pleased to have this opportunity. >> do you need assistance from sfgtv?
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>> we had it set up but bear with me. i'm not going to read every slide to you. i think it's important as i said we recognize the support that you have consistently provided us to upgrade the fleet. this is quick -- a quick overview that reminds you as we look at the fleet as the oldest and most heavily utilized as any major system in the country we moved aggressively through a number of means and campaigns as well as new purchase toss figure out
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what the right strategies were from improved maintenance to campaigns on high failure components to bringing down the age of the fleet and with your help and support we have moved forward on all of those fronts. one of the things we did back in 2012 we joined the minnesota cooperative consortium which was a competitive process that was set up by the state of minnesota that we were able to use to purchase new vehicles in an expeditious fashion and in our case when we went to the minnesota consortium we engaged in discussions with three vendors. settled on one and we made in 2012 a purchase of 62 vehicle under the minnesota consortium. bear with me one
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second. my apologies it's not going forward, so what i will do is to is the extent i can is talk about this and the first group of 62 and used in the routes facility all across the city and as a frame of reference i would say 70% of the trips are on the bus system. it's really the backbone of our system. the buses are hybrid technology
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that allow us to meet the aggressive clean air goals that we have, and hybrid technology is still in an emerging one, and even in 2013 only about -- just under 9% of the buses purchased in the u.s. hybrid technology and this is the second generation. the overwhelming of buses are clean diesel -- >> may i ask you a question n terms of the 62 buses what engines were used for those buses? >> thank you supervisor. in the 62 because it's new technology what we did is have -- we split the engines between the two leading manufacturers, a firm called allison and bae and the first 62 23 were
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allison and the rest bae and that goes back to the fact this is new technology so we talked to our inside experts. we talked to our outside experts. we talked to other people in the country and there was not a lot of compelling information. we also talked to the vehicle manufacturers. okay. what are you selling more of? what is the performance status? what we did is agree in the first group to divide the technology and conduct our own assessment of which one would perform and what we decided to do when we conducted the assessment was identify a set of factors -- a set of factors that we could use and they're up on the board now
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that we would use toest the technology, the few efficiency, the reliability, and in particular one of the things that is important to us and we will be back to talk about this in some detail with the purchase of the new lrv vehicle but a concept of what life cycle costing or maintainablity so in the first group we split the difference and 23 allison and the reminder bae and we will take a look at the factors and the information we have will inform the next decision how to do it and the reason we did that simply is because there wasn't a lot of hard information saying one was better than the other. >> by the way i think that should be commended and the new technology and get 62 buses and maybe two different kinds of engines and see how they perform. can you tell me where
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the internal evaluation of the two is right now? >> yeah. it's ongoing because what we did when we got the 62 -- the 62 case in and the last ones were accepted in august so they began to go into service and build miles to start the evaluation, so the evaluation is ongoing, and as i indicated in the chart we are collecting data. we will continue to use these four factors in looking at the buses as a way to inform the next series of decisions. i would also remind the board as part of the effort to replace the entire rubber tire fleet over a five year period we are on the street right now with another solicitation to buy another buses, 30, 40 and 60-foot buses, so there will be
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a prebid meeting in the first week of march we will do that, so part of as we go through that procurement process part of what we will do is continue to build data on the fuel efficiency and reliability and apply that down the road and from many perspectives you would like to end up with one technology but again i emphasize that this is very much still in the development stages. >> do you have a sense of how the two types of engines are performing based on your preliminary review? >> yeah. we have a month or two of data and i wouldn't draw any conclusions from it initially let's say in the first couple of months as we build the mileage up one of the systems, bae
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seems to be better from a few efficiency standard. i think there is some other features of the engine that are -- may help us. it's important on the third point -- i'm sorry. the third point on the slide here for example the question was raised well why did you in the second round of buses you had 62. we split it and the opportunity to buy 50 came why didn't you split it again? why didn't we choose to go with bae? and essentially we talked about it and looked at it and again absent if you remember the time i will show you the time table in a minute but at the time we didn't have a lot of performance data to judge so number one first and foremost in this case and the bae engine
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and the purchase cost is cheaper so that means in this particular round we got essentially 2-3 extra buses. the other point i just want to make on this in the case of our buses runoff an air system to the extent it controls the doors, the brakes so to the extent we res duce penetration of something like oil so those are the reasons that we simply said okay when we had the opportunity and had to make a decision we decided to go with the bae rather than split -- rather than split it. >> can i ask you overarching objective is to do some of these things and how are each of the
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engines proving to be more reliability? >> the good news is they're far more reliable than the buses we had before. one thing we are seeing quickly and we expected this and it will move around with more buses and more mileage but what as we use as the -- bear with me. i just -- i'm going to say the traditional method of reliability for us is the what we call mean distance between failure and take the bus runs and the denominator and the instances in the numerator and with the buses and the different fleets of about 4,000. now we're up over 11. we had months with the new buses that are performing well above that so
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they improved the reliability. versus one the other it's too early in the process to say. both are performing much better than we had. whether one of prevail stay tuned. that remains to be seen. >> that's a fundamental problem that i have and i guess it's my own -- it's a different perspective because i feel that if you're going through an internal review to determine which one is more reliable that before you proceed to purchase additional buses that you actually want to know the question of which one is more reliable before you go forward with an additional purchase. that's what i don't understand why if for instance i would imagine it's entirely possible that this internal review leads you to conclude that the allison engine is better than the bae
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engine; right? that's a possibility? >> it is a possibility. >> so given that possibility but we went ahead and invested an additional $38 million to buy the bae engine why would we make that choice before the internal review is conducted. >> okay what i put up here if we can put this on the screen. this is the timing and this will explain -- i want to be clear that the evaluation is ongoing. we're comfortable with the factors that we have and will continue to apply that and any future decisions will be informed by what the factors show us, but what we have is i mentioned that in the new buses came in in the spring, and the first 62 that we split, so in may of this year, because prior
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to this the next scheduled purchase is 18 months away which would have given us a definitive study and data and we could have made the call so in may of this year we're approached by new flier and they said we had a deal fell through and have a hole in our production line. are you interested in purchasing more buss? we told them we were interested and look to get the money and need to go through an approval process and they said okay and they made us a sales pitch. we reviewed it. we felt it was in the best interest of the city. we forwarded it in july to the legal department and the city attorney's office and reviewed it and we put it into the normal process which means in july we started to prepare the documents and october 15 we took it to the sf mta board.
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we then brought it to the board of supervisors budget and finance committee and to the full board on the 29th of october. the notice of proceed was issued on november 6 and the first bus was accepted on december 6, so in answer to the question "why didn't we wait for the full evaluation?" . we had an opportunity to purchase buses and a window because the window was provided by somebody else and i don't know whose contract falling through, so what we ended up was 50 new buses at a price that is less than we paid for the 62. regardless whether it's an allison or bae it will improve the reliability of the fleet. it will also move us to reducing the number of diesel buss in the fleet more hybrid
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and it doesn't preclude later on -- it's just more data available from continuing the study and applying that, so in essence the short answer to your question was it was the timing. >> when you begun the process in july and start talking to them or may and purchasing the additional buses. at that point what did you know about the 62 buses that you had purchased before? i mean did we know how bae buses were performing relative to allison buses at this point? >> not much. again keep in mind the buses started to come in at april, may so the process is even as they're coming in you begin to have to first of all inspect them, accept them, train operators, so they didn't -- by the time -- in the summer we didn't have such data. they
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didn't run enough miles. >> i guess that's a concern i have to be honest. i'm not going to be -- i mean i wouldn't purchase a personal vehicle that's less money without understanding the reliability of that vehicle, and if you at this point just received buses in may or actually april you said; right? i would think you would want to know more about how they're performing before you went ahead and purchased more and the money you're saving you're still paying $700,000 a bus. i don't understand why you would not wait to have enough data about reliability before you purchased new buses, but let me ask you a question in terms of one of the issues that has
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been raised was that these buses were delivered to the mta before the contract was approved by the board of supervisors. can you explain sort of how that happened? >> well, let me -- let me first say that it was important when we highlighted the date of the notice of proceed in november there were no buses accepted or delivered to the mta without a contract. we followed the letter of the process and went through the legal process to get authority to accept so there was not and at the budget and finance committee meeting for example on the 23 of october i was asked a question by supervisor avalos he had some reports of buzzes were in the bay area. >> >> and that in fact is true. i
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said "yes, the buses were all scheduled to be produced in 2013 and that new flyer was sending them to the bay area. they were sending them to alameda to a company ccw which they made arrangement to do work on the buses and part of that was their own decision that as they produced buses they had to move them -- i think for nothing more than space limitations at the plant in minnesota, so the buses were -- some were some buss in the bay area prior to the notice to proceed but they were not in our possession. they were not our buses and it gets to the point, so it may seem like a fine point, but i appreciate the opportunity to explain it. on the rt question on 8711 part of all of the procurements and the
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62 and the 50 it's our practice to have the buses driven by the plant. it is almost 2,000 miles or around 2,000-miles and that give us us an opportunity to debug or break in the buses and 10% of 50 is five so five buses broke down in route on the way to san francisco. my personal preference is that it's better than they break down there and not after we have them in service and reveals the problems and we design them and get them here and with that particular bus that's what we did with all of the buses is
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have them driven. on the point of the maintenance record -- again absolutely right. we didn't have the maintenance record because it's not yet our bus. when the bus is accepted by us the maintenance records will be turned over so we know what problems that encountered. >> so i mean -- i guess -- let me just break it down a little more. first of all if there is a bus that you just purchased that takes a month to get from minnesota to san francisco to me that's a red flag, and i don't understand why you have to accept a bus before you get the maintenance records. i would actually think that that it actually it's putting the cart before the horse. i would want to get the maintenance records before i actually accept the
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bus because depending on what i find in the maintenance records i may decide not to accept it, and so why would i accept something without actually having all of the information about its mechanical history? i don't understand that. >> well, we -- i think in the process here in terms of accepting a particular bus we would go through and new flyer is responsible to make repairs until we accept it so part of what we do when the bus is turned over to sf mta on the property is develop a punch list which is a list of components or failures that we go through them and all of them have to be corrected and signed off and inspected before we inspect the bus so we know not only on the individual buses but on the data and have a record of all


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